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Tuesday, November 17, 2009

Designing complexity - Are we deluding ourselves?

Perhaps more than 10 years ago I heard Don Coffey speak. I do not remember the specific topic but he introduced the talk with a aerial picture of the island of Manhattan. He pointed out that there were somewhere in the neighborhood of five million people on this island and there was three days of food. He posed the question "How do all these people remain fed?"

His point was that there was no master feeding plan, no food czar, no ultimate authority. However, there was an abundance and a variety of foods which rivaled any place on earth. How could that be? Something as important as food, which is essential to the lives of all those millions of people, could not be left to chance. Who could have designed such a system?

The system was not designed, but it evolved over time... a long, long time. The rules were basically simple. If I have or create something I own, I can trade it for something else someone else is willing to give up voluntarily in trade. Voluntary exchange which occurs in an environment respectful of the rule of law, if the rules are right is an amazing facilitator of spontaneous order and complexity. Ultimately that complexity was manifested by amazing density, complexity, and abundance which is now the island of Manhattan.

The present state was not intentionally designed or engineered by men. Devoutly religious people are ridiculed for believing in deity based intelligent design. Some devoutly secular people also worship at this same altar blindly, embracing an equally implausible notion that mortal men can achieve god like powers associated with intelligent design of complex systems. It is what Freidrich von Hayek termed the fatal conceit.

Complex and durable systems are systems that can respond to change. It is very difficult to design the ability to respond to change into complex systems. Complex and durable systems come as a consequence of iterative processes. These systems can adapt if they can place lots of little bets and can take many small losses in order to find innovation and adaptation to an always changing world.

In the present health care environment, we are tied to systems that are cumbersome and almost impossible to change. In every domain imaginable we are constrained, whether financially or via regulatory shackles. Our financing models could not be more flawed. When I think of our almost complete dependence on federal funding for our research and teaching missions I cannot help but think of Koala bears and eating only eucalyptus leaves. Cute and quaint, but not a particularly viable strategy for thriving. The clinical domain is not far behind in moving to a eucalyptus leaf only diet.

The regulatory chaos is beyond crazy. We have licensing bodies, non-state regulatory bodies, regulations relating to state payers, agencies which regulate insurance mandates, private/public partnerships to set prices of services, and the general direction of these activities is toward increasing the layer upon layer of rules and regulations. Each new program is conceived in broad terms in documents which rival War and Peace in length, yet these serve only as a framework for the actual regulations which are subsequently written. The regulations are written by agents who cannot help but be insulated from the real world unintended consequences of their ramblings. It is the untended consequences which will have much more lasting effects than anything initially planned.

It all comes back to how we conceptualize the formation of complex networks of human interaction. How do all those people on Manhattan get their food? Intelligent design by humans invariably results in not so intelligent constructs. A bill in Congress to create a universal food care program with a public option for the island of Manhattan would lead to out of control costs, reduced choices, and many hungry people.

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